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Business News/ Market / Stock-market-news/  K.C. Chakrabarty denies any differences with RBI governor
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K.C. Chakrabarty denies any differences with RBI governor

Chakrabarty, who resigned as RBI's deputy governor, says he took the decision for personal reasons

Chakrabarty’s stint at RBI turned controversial in August 2010, when he was stripped of most of his key portfolios days after he made public comments on RBI’s monetary policy stance on tackling inflation, when D. Subbarao was the governor. Photo: Abhijit Bhatlekar/MintPremium
Chakrabarty’s stint at RBI turned controversial in August 2010, when he was stripped of most of his key portfolios days after he made public comments on RBI’s monetary policy stance on tackling inflation, when D. Subbarao was the governor. Photo: Abhijit Bhatlekar/Mint

Mumbai: After submitting his resignation as Reserve Bank of India (RBI) deputy governor three months before the end of his term, K. C. Chakrabarty on Friday denied any differences with governor Raghuram Rajan and said he took the decision to leave early for personal reasons.

Chakrabarty’s comments came as the central bank thanked the outgoing deputy governor, whom it described in a statement as a man who “always speaks his mind".

The 62-year-old career banker on Thursday submitted his resignation letter, which said he wanted to leave on 25 April instead of 30 June, when his term was to end. He said on Friday he had already informed Rajan about his plans.

“I think I should have the discretion of deciding my own retirement date. Absolutely there is no problem, this was communicated to Governor well in advance. It was my personal decision," he told reporters, saying he would decide on future plans after 25 April.

On whether there were any differences with Rajan over policy matters, the usually outspoken Chakrabarty said: “There is no such problem... I am not running away". As regards future plans, he said he will think about it after 25 April. “At present there is no plan".

On Friday, the RBI released a statement praising Chakrabarty.

“The Reserve Bank is very grateful for his many years of excellent work in very difficult times. Dr. Chakrabarty always speaks his mind, and has been a very valuable guide for successive governors," the central bank said. Chakrabarty’s stint at RBI turned controversial in August 2010, when he was stripped of most of his key portfolios days after he made public comments on RBI’s monetary policy stance on tackling inflation when D. Subbarao was the governor. RBI should have been more aggressive in raising interest rates to fight inflation, Chakrabarty said.

In 2012, a public spat between Chakrabarty and former chairman of State Bank of IndiaPratip Chaudhuri became the subject of a market-moving joke by Subbarao.

During a public speech, Subbarao said he had appointed a committee to debate whether to do away with the cash reserve ratio (CRR) requirement—the portion of deposits that banks are required to set aside with RBI.

“The members of that committee are Dr Chakrabarty and Pratip Chaudhuri," Subbarao said, keeping a straight face. “Both of them will be locked up in a room, will not be released until they have reached a conclusion, and the timeframe is that they will not submit their report before my term as governor is over." The audience broke into laughter but bank stocks jumped after the “announcement" before settling down after realizing it was a joke. Chaudhuri had argued for the abolition of CRR while Chakrabarty wanted it to stay. Chakrabarty, former chairman and managing director of Punjab National Bank, was appointed as RBI deputy governor for a three-year term on 15 June 2009 and was subsequently given a two-year extension.

“In recent years, Dr. Chakrabarty has spearheaded the Reserve Bank’s move towards risk-based supervision. His experience as a banker has given him the ability to diagnose weaknesses in the system, and made him a forceful advocate for change," the RBI said, adding that a search is on for his successor.

Agencies contributed to this story.

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Published: 21 Mar 2014, 04:48 PM IST
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